Friday, June 24, 2005
HARTFORD, CT – Under a new law signed today by Governor M. Jodi Rell, consumers in Connecticut will have the right to put a security freeze on their credit files to prevent identity thieves from opening new credit accounts in their names. And businesses operating in Connecticut will be required to notify consumers whose sensitive information has been compromised as a result of a breach in data security.
“Identity theft has become an epidemic in the U.S. that ruins the credit records of countless consumers every year,” said Susanna Montezemolo, Policy Analyst with Consumers Union’s Financial Privacy Now campaign. “Connecticut’s new law will help ensure that consumers are made aware when a company’s lax security puts them at risk of identity theft and gives them the power to stop crooks from opening new lines of credit in their names.”
A security freeze enables the consumer to prevent anyone from looking at his or her own credit reporting file for purposes of granting credit unless the consumer chooses to let that particular business look at the information. This gives the consumer complete control over who has access to the information needed to process a credit application and effectively prevents crooks from opening new accounts in the consumer’s name. When the consumer is applying for credit, the security freeze can be lifted temporarily so the application can be processed.
Connecticut’s new security freeze law applies to all consumers, regardless of whether they have been victims of identity theft. All consumers can put a security freeze on their credit file for $10 and lift it temporarily for the same amount. The provision of the law requiring businesses to notify consumers of security breaches of sensitive information applies to all unencrypted files, media or computerized data. A copy of Connecticut’s security free law, which goes into effect on January 1, 2006, is at: http://www.cga.ct.gov/2005/act/Pa/2005PA-00148-R00SB-00650-PA.htm
Connecticut’s security freeze law is stronger than existing safeguards available to consumers. Right now, identity theft victims can put fraud alerts on their credit files and pay for credit monitoring services to detect further abuse. But this won’t erase the damage that has been done by the time they discover their identity has been stolen.
Unfortunately, identity theft victims often find out they been taken advantage of long after they’ve first been defrauded and end up spending, on average, $1,400 and 600 hours cleaning up their tarnished credit record. In the meantime, they may have a tougher time getting a good interest rate on a car loan, home mortgage or credit card, and may even be denied employment.
“Connecticut’s new law gives all consumers the right to put a security freeze on their credit files so they can prevent thieves from hurting their credit in the first place,” said Christopher Phelps on ConnPIRG. “At a time when identity theft has become increasingly common, this safeguard offers consumers a powerful tool to keep crooks from damaging their financial futures.”
Eight other states have security freeze laws on the books and others are expected to adopt them in the coming weeks. Like Connecticut, California allows all consumers to put a security freeze on their credit reporting file at any time, even if they have not been victimized by identity theft. Legislators in Colorado, Louisiana, Maine, and Nevada have passed similar security freeze laws for all consumers, but they have not gone into effect. The Louisiana security freeze law will take effect on July 1, while Nevada’s law will start on October 1. The security freeze laws in Maine and Colorado will go into effect next year.
Texas allows consumers to put a security freeze on their credit files after they have filed a police report indicating that they have become victims of identity theft. Vermont identity theft victims will get the security freeze safeguard beginning July 1. Washington state’s new security freeze law covering identity theft victims and individuals who have been notified that their personal information has been lost or stolen will go into effect on July 24. Illinois Governor Rod Blagojevich is expected to sign into law a security freeze bill for identity theft victims, which was recently approved by state lawmakers.
Susanna Montezemolo, CU: 202-462-6262
Christopher Phelps, ConnPIRG: 860-836-9353 (cell)
Michael McCauley: 415-431-6747, ext 126